Robinson v. Omer

IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE

FOR PUBLICATION

WILLIAM ROBINSON, a/k/a ) Filed: September 15, 1997
BILLY C. ROBINSON, )
) DAVIDSON CIRCUIT
Plaintiff/Appellee, )
) Hon. Barbara N. Haynes
Vs. ) Judge
)
JAMES R. OMER, SR., )
)
Defendant/Appellant. ) No. 01S01-9611-CV-00228

FILED
September 15, 1997

Cecil W. Crowson
Appellate Court Clerk
FOR PLAINTIFF/APPELLEE: FOR DEFENDANT/APPELLANT:

Robert L. Callis Winston S. Evans
Callis & Hershey Evans, Jones, & Reynolds
Mt. Juliet, Tennessee Nashville, Tennessee

OPINION

COURT OF APPEALS REVERSED IN PART
JUDGMENT OF TRIAL COURT REINSTATED. DROWOTA, J.
 The plaintiff, William Robinson, brought this action against the defendant,

attorney James R. Omer, Sr., alleging negligent misrepresentation.1 Robinson asserts

that he agreed to secretly videotape the sexual encounters of his friend, and Omer’s

client, Dewey Lineberry, in reliance upon Omer’s erroneous advice that the videotaping

was legally permissible. Robinson initiated this action seeking to recover

compensatory and punitive damages after he settled the civil lawsuits which were filed

against him by some of the women who were secretly taped.

The trial court granted Omer’s motion for summary judgment, but the Court of

Appeals reversed, finding disputed issues of material fact. Thereafter, we granted

Omer’s application for permission to appeal. We emphasize that Omer denies giving

such advice to Lineberry. However, taking the allegations as true and viewing the

evidence in the light most favorable to Robinson, the nonmoving party, as we must for

purposes of summary judgment, we conclude that the allegedly negligent and false

legal advice was supplied for the guidance of others in personal matters rather than

business transactions. Therefore, the defendant met his burden of negating an

essential element of the plaintiff’s claim for negligent misrepresentation by establishing

that the alleged false information was not supplied for the guidance of others in their

business transactions. Restatement (Second) of Torts, Section 552 (1977). The

burden then shifted to the plaintiff, the non-moving party, to show that the information

was supplied for a business purpose. The plaintiff failed to meet that burden.

Accordingly, the trial court properly granted summary judgment. The judgment of the

Court of Appeals with respect to the claim of negligent misrepresentation is reversed,

and the trial court’s grant of summary judgment to the defendant is reinstated.

1
Robinson also alleged, in this action, outrageous conduct and invasion of privacy. The trial
cou rt gra nted Om er’s m otion for su mm ary jud gm ent o n the se c laim s and the C ourt o f App eals
affirmed. Robinson did not seek to appeal from the Court of Appeals’ judgment as to those claims.

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 BACKGROUND

Because summary judgment was awarded to the defendant, the following

statement of facts is based upon the most favorable view of the record towards the

plaintiff, the nonmoving party.2

William Robinson, the plaintiff, and Dewey Lineberry, have been friends and

business associates for many years. In 1986, Robinson, a contractor by trade, agreed

to construct a three story office building for Lineberry, a local businessman, in Mt. Juliet,

Tennessee. On the third floor of the building Robinson constructed, at Lineberry’s

direction, a “camera room” equipped with two way mirrors through which a person could

look into a weight room and bathroom located next to Lineberry’s office. Lineberry told

Robinson that he intended to use the camera room to secretly videotape his sexual

encounters because he was concerned that he might be falsely accused of rape in the

future. Lineberry believed that having videotapes of his sexual encounters would

protect him from such allegations. Robinson was aware of Lineberry’s concern and

actively participated in the construction of the camera room.

The defendant, James R. Omer, Sr., is a licensed Tennessee attorney who

represented Lineberry in a variety of personal and business matters between the mid-

1970's and 1990. According to Robinson’s amended complaint, Omer advised

Lineberry, prior to the construction of the office building, that building a camera room

and secretly videotaping sexual encounters without the consent of the women involved

was completely legal and comparable to keeping a diary. According to the allegations,

Omer suggested that Lineberry persuade his good friend Robinson to act as

cameraman. When Lineberry relayed Omer’s suggestion, Robinson was reluctant to

2
Byrd v . Hall , 847 S.W .2d 208, 215 (Tenn. 1993 ).

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assume the role of cameraman. However, Lineberry called Omer from his office for the

purpose of assuring Robinson of the legality of the secret taping. According to the

allegations of record, Omer, who had been told Robinson was present, assured

Lineberry that the activity was legally permissible, and again compared it to keeping a

diary.

Robinson did not have an attorney-client relationship with Omer, and he never

personally received legal advice from Omer about the legality of the secret videotaping.

However, Robinson, from the concealed camera room, secretly videotaped numerous

instances of Lineberry having sexual intercourse with women in the weight room and

bathroom which were located on the third floor of the office building. Robinson

videotaped Lineberry’s sexual encounters from 1986 to 1993.

The videotaping remained secret until Omer informed District Attorney General,

Tom P. Thompson, Jr., on January 6, 1994, that Lineberry had a secret camera room in

his office which he had used to film a lingerie party. Even though he had known about

the camera room, by his own admission, for about one year, Omer provided the district

attorney with this information only after receiving a complaint which Lineberry had filed

against him with the Board of Professional Responsibility.3

Based upon the information provided by Omer, Wilson County law enforcement

officers obtained a warrant to search Lineberry’s office. The search uncovered

videotapes of Lineberry having sex with various women. Robinson admitted to police

3
Acc ordin g to th e alleg ation s, so me time prior t o 199 2, Om er pro mis ed Lin ebe rry a fe e in
exchange for personal injury referrals. Lineberry made such a referral that resulted in a substantial
settlement, but Omer refused to pay the promised fee. Lineberry apparently felt mistreated and
filed a complaint against Omer with the Board of Professional Responsibility. Omer received the
complaint on December 20, 1993 and called the district attorney general on January 6, 1994.

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that he had operated the video camera. Although no criminal charges were filed

against Lineberry or Robinson, law enforcement officials contacted several of the

women who were taped, and four of them filed civil lawsuits against both Lineberry and

Robinson, alleging, among other things, invasion of privacy and outrageous conduct.

Robinson settled the claims filed against him and then instituted this lawsuit

against Omer asserting negligent misrepresentation. Robinson alleged that he relied

upon Omer’s advice, given to Lineberry that, secretly videotaping Lineberry’s sexual

encounters, without the consent of the women involved, was legally permissible.

Robinson claimed that Omer knew or should have known that he would rely upon that

advice. Robinson also asserted claims of outrageous conduct and invasion of privacy.

Omer moved to dismiss the action, and the trial judge held a hearing on the

motion. Because matters outside the pleadings were presented and considered, the

trial judge treated it as a motion for summary judgment which she granted, in favor of

Omer, on all three claims. Robinson appealed, and the Court of Appeals affirmed the

trial court’s decision with respect to the claims of invasion of privacy and outrageous

conduct, but reversed the grant of summary judgment on the negligent

misrepresentation claim. Thereafter, we granted Omer permission to appeal and now

reverse the judgment of the Court of Appeals with respect to the claim of negligent

misrepresentation, and reinstate the judgment of the trial court.

SUMMARY JUDGMENT

The standards governing an appellate court’s review of a summary judgment

motion are well settled. Our inquiry involves purely a question of law; therefore, we

review the record without a presumption of correctness to determine whether the

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absence of genuine issues of material facts entitle the defendant to judgment as a

matter of law. McCarley v. West Quality Food Service, ___ S.W.2d ___ (Tenn. 1997);

Bain v. Wells, 936 S.W.2d 618, 622 (Tenn. 1997); McClung v. Delta Square Ltd.

Partnership, 937 S.W.2d 891, 894 (Tenn. 1996); Byrd v. Hall, 847 S.W.2d 208, 210

(Tenn. 1993); Tenn. R. Civ. P. 56.03.

Likewise, the standards governing the assessment of evidence in the summary

judgment context are also well established. Mere conclusory assertions that the non-

moving party has no evidence are clearly insufficient. Byrd, 847 S.W.2d at 215. The

movant must either affirmatively negate an essential element of the non-movant’s claim

or conclusively establish an affirmative defense. McCarley, __S.W.2d at ___; Byrd, 847

S.W.2d at 215, n. 5. If the movant fails to negate a claimed basis for the suit, the non-

movant’s burden to produce evidence establishing the existence of a genuine issue for

trial is not triggered and the motion for summary judgment must fail. Id. If the movant

successfully negates a claimed basis for the action, the non-movant may not simply rest

upon the pleadings, but must offer proof to establish the existence of the essential

elements of the claim.4 Id. Courts must view the evidence and draw all reasonable

inferences in the light most favorable to the nonmoving party. Bain, 936 S.W.2d at 622;

Byrd, 847 S.W.2d at 210-11. If both the facts and conclusions to be drawn from the

facts permit a reasonable person to reach only one conclusion, summary judgment

should be granted. McClung, 937 S.W.2d at 894; Carvell v. Bottoms, 900 S.W.2d 23,

26 (Tenn. 1995).

4
As we pointed out in Byrd, and reaffirmed in McCarley, a no nm oving party m ay sat isfy his
or her burden by (1) pointing to evidence overlooked or ignored by the moving party that establishes
a material factual dispute, (2) by rehabilitating the evidence attacked in the moving party’s papers,
(3) by producing additional evidence showing the existence of a genuine issue for trial, or (4)
submitting an affidavit explaining why further discovery is necessary as provided for in Tenn. R.Civ.
P. 56.06 . McCarley, ___ S.W .2d at ___ ; Byrd, 847 S.W .2d at 215 , n. 6.

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 Although the standards are strict, in this case summary judgment is appropriate.

Omer met his burden of negating an essential element of the claim of negligent

misrepresentation. The burden then shifted to Robinson to show that the information

was supplied for guidance in business transactions. Robinson failed to satisfy that

burden. The evidence in this record, viewed in the light most favorable to Robinson, the

nonmoving party, fails to establish the existence of an essential element of the claim --

information supplied for the guidance of others in their business transactions.

NEGLIGENT MISREPRESENTATION

This Court has recognized three distinct actions in tort based upon

misrepresentation: fraud or deceit; strict liability under Section 402B of the Restatement

(Second) of Torts (1965); and negligent misrepresentation under Section 552 of the

Restatement (Second) of Torts (1977). Ritter v. Custom Chemicides, Inc., 912 S.W.2d

128, 130 (Tenn. 1995); see also John Martin Co. v. Morse/Diesel, Inc., 819 S.W.2d 428

(Tenn. 1991); Jasper Aviation, Inc. v. McCollum Aviation, Inc., 497 S.W.2d 240, 242-43

(Tenn. 1972).

This case concerns the third cause of action, negligent misrepresentation.

Tennessee has adopted Section 552 of the Restatement (Second) of Torts “as the

guiding principle in negligent misrepresentation actions against other professionals and

business persons.” Bethlehem Steel Corp. v. Ernst & Whinney, 822 S.W.2d 592, 595

(Tenn. 1991). Section 552 provides, in pertinent part, as follows:

(1) One who, in the course of his business, profession or
employment, or in any other transaction in which he has a
pecuniary interest, supplies false information for the
guidance of others in their business transactions, is subject
to liability for pecuniary loss caused to them by their
justifiable reliance upon the information, if he fails to

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 exercise reasonable care or competence in obtaining or
communicating the information.

(2) Except as stated in Subsection (3), the liability stated in
Subsection (1) is limited to loss suffered

(a) by the person or one of a limited group of persons for
whose benefit and guidance he intends to supply the
information or knows that the recipient intends to supply it;
and

(b) through reliance upon it in a transaction that he intends
the information to influence or knows that the recipient so
intends or in a substantially similar transaction.

Restatement (Second) of Torts, §552 (1977) (emphasis added).

In discussing the requirements for recovery under Section 552, this Court has

stated that liability in tort will result, despite the lack of contractual privity between the

plaintiff and defendant, when,

(1) the defendant is acting in the course of his business, profession, or
employment, or in a transaction in which he has a pecuniary (as opposed
to gratuitous) interest; and

(2) the defendant supplies faulty information meant to guide others in
their business transactions; and

(3) the defendant fails to exercise reasonable care in obtaining or
communicating the information; and

(4) the plaintiff justifiably relies upon the information.

John Martin Co., 819 S.W.2d at 431 (emphasis added); accord Ritter, 912 S.W.2d at

130.

Applying this formulation of the rule, this Court has allowed non-clients to recover

from attorneys under Section 552. See e.g. Collins v. Binkley, 750 S.W.2d 737 (Tenn.

1988); Stinson v. Brand, 738 S.W.2d 186 (Tenn. 1987). In these cases, the lawyers

had negligently provided erroneous information in the course of real estate transactions

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which was relied upon by nonclient participants to the transactions. This Court held

recovery was appropriate, even though the plaintiffs were not clients, because the

advice was given for the guidance of the plaintiffs in the course of the real estate

transaction and reliance upon that advice was justifiable and foreseeable.

Likewise, in the non-lawyer cases involving application of Section 552, recovery

has been allowed only when the advice or information negligently supplied was given in

the course of a commercial or business transaction for guidance of others in their

business transactions. See e.g. Bethlehem Steel Corp., 822 S.W.2d at 592 (national

accounting firm which negligently prepared an audit report regarding customer of

manufacturer held liable to manufacturer which relied upon the audit report to its

detriment in extending credit to customer); John Martin Co., 819 S.W.2d at 429

(construction manager who negligently supplied information regarding the construction

project held liable to subcontractor who relied upon the information in performing work

at the site); Tartera v. Palumbo, 453 S.W.2d 780 (Tenn. 1970) (land surveyor who

negligently prepared a plat for the purchaser of property held liable to sellers because

he had full knowledge that the survey was to be used for describing the property in the

warranty deed upon which both the sellers and buyers would rely); Shelby v. Delta Air

Lines, Inc., 842 F.Supp. 999, 1015 (M.D. Tenn. 1993)(“The Tennessee cases involving

negligent misrepresentation all involve commercial transactions.”).

In contrast, the advice allegedly given by Omer, upon which Robinson claims to

have relied, was not provided for the guidance of Lineberry and Robinson in a business

transaction. Indeed, the conduct of Lineberry and Robinson, in no way, was related to

a commercial or business transaction. Robinson videotaped Lineberry’s sexual

encounters as a favor and accommodation to Lineberry, as is evident from Robinson’s

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deposition testimony. Robinson agreed that he considered Lineberry to be “a really

good friend,” and said that he received no payment for operating the video camera for

Lineberry. When asked whether his “willingness to videotape” was attributable to a

desire to protect a financial interest he had with Lineberry due to their business

relationship, Robinson responded as follows:

A. I don’t think so. . . .

Q. I’m just asking your motivation. I mean, you’ve told us that
you did it because [Lineberry] asked you to, and because he
wanted to be protected from a false claim of rape. And all
I’m trying to follow up on is whether or not part of your
motivation was that, in light of your business relationship
with him, you felt a financial necessity to protect yourself and
him?

A. I don’t think that would have been a primary concern of
mine, no sir.

Q. Would it have been any concern of yours?

A. I can’t say as it crossed my mind, no, sir.

Therefore, even assuming, as we must, that defendant Omer advised Lineberry that

secretly videotaping his sexual encounters, without the consent of the women involved,

was legally permissible, Robinson’s negligent misrepresentation claim must fail

because that advice was not given for the guidance of Lineberry or Robinson in their

business transactions. See Shelby, 842 F.Supp. at 1015 (“[T]he language of Section

552 expressly refers to the negligent supplying of false information ‘for the guidance of

others in their business transactions.’”) (emphasis in original) (applying Tennessee law);

see also Pickering v. Pickering, 434 N.W.2d 758, 762 (S.D. 1989) (husband’s claim of

negligent misrepresentation against wife for misleading him about the paternity of a

child born during their marriage failed because it did not arise from a commercial or

business transaction).

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 Robinson videotaped Lineberry’s sexual activities solely as a favor to his good

friend. Lineberry never paid Robinson for his efforts, and Robinson testified that when

he decided to act as cameraman, business interests did not “cross[] his mind.”

Therefore, the evidence in this record, viewed in the light most favorable to Robinson,

fails to establish an essential element of the claim for negligent misrepresentation --

that the allegedly negligent advice given by Omer was meant to guide others in their

business transactions.

CONCLUSION

Because we conclude that the allegedly negligent legal advice supplied by Omer

was for the guidance of others in personal matters rather than business transactions,

the defendant met his burden of negating an essential element of the plaintiff’s claim of

negligent misrepresentation under Section 552, Restatement (Second) of Torts (1977).

Consequently, the judgment of the Court of Appeals is reversed with respect to the

claim of negligent misrepresentation, and the trial court’s grant of summary judgment to

the defendant is reinstated.

FRANK F. DROWOTA, III,
JUSTICE

CONCUR
Anderson, C.J.
Reid, Birch, Holder, JJ.

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